1066134--8/29/2007--CORINTHIAN_COLLEGES

related topics

{regulation, government, change}

{financial, litigation, operation}

{acquisition, growth, future}

{operation, natural, condition}

{system, service, information}

{product, market, service}

{personnel, key, retain}

{provision, law, control}

{competitive, industry, competition}

Risks Related To Extensive Regulation Of Our Business If we fail to follow extensive regulatory requirements for our business, we could suffer severe fines and penalties, including loss of access to federal student loans and grants for our students. The U.S. Congress may change the law or reduce funding for federal student financial aid programs, which could harm our business. If we do not meet specific financial responsibility ratios and tests established by the ED, our U.S. schools may lose eligibility to participate in federal student financial aid programs. Our U.S. schools may lose eligibility to participate in federal student financial aid programs if the percentage of their revenues derived from those programs is too high. Our U.S. schools may lose eligibility to participate in federal student financial aid programs if their current and former students loan default rates on federally guaranteed student loans made by third parties are too high. One or more of our institutions may have to post a letter of credit or be subject to other sanctions if they do not correctly calculate and timely return Title IV Program funds for students who withdraw before completing their program of study. If regulators do not approve our acquisitions, the acquired school(s) would not be permitted to participate in federal student financial aid programs. If regulators do not approve transactions involving a change of control or change in our corporate structure, we may lose our ability to participate in federal student financial aid programs. If any of our U.S. schools fails to maintain its accreditation or its state authorization, that institution may lose its ability to participate in federal student financial aid programs. If we fail to demonstrate administrative capability to the ED, our business could suffer. Regulatory agencies or third parties may commence investigations, bring claims or institute litigation against us. Investigations, claims and actions against companies in our industry could adversely affect our business and stock price. We are subject to sanctions if we pay impermissible commissions, bonuses or other incentive payments to individuals involved in certain recruiting, admissions or financial aid activities. Failure to comply with extensive Canadian regulations could affect the ability of our Canadian schools to participate in Canadian financial aid programs. Operational Risks That Could Have a Material Adverse Effect on Our Business If the financial institutions that provide alternative loans to our students withdraw from that business or significantly change their credit criteria, our business would be harmed. We rely on a single company to provide financial aid processing for our students. If that company fails or refuses to timely provide such service, or materially increases its fees, our business could be harmed. If students fail to pay their outstanding balances, our business will be harmed. Failure to effectively grow our revenues or reduce our expenses could harm our business. If we cannot effectively identify, acquire and integrate additional schools, it could harm our business. Failure to effectively manage opening new schools and adding new services could harm our business. Our success depends upon our ability to recruit and retain key personnel. Anti-takeover provisions in our charter documents and Delaware law could make an acquisition of our company difficult. We face litigation that could have a material adverse effect on our business, financial condition and results of operations. Failure to keep pace with changing market needs and technology could harm our business. Competitors with greater resources could harm our business. Failure to obtain additional capital in the future could reduce our ability to grow. If natural disasters, terrorist attacks, public transit strikes or economic downturns occur in specific geographic areas where we have a high concentration of schools, our business could be harmed.

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1066134--8/29/2007--CORINTHIAN_COLLEGES_INC